Wills and trusts are two types of estate planning tools that are used to transfer assets to heirs upon the death of the creator. How the asset transfer occurs, and the level of protections available to those assets, are different between wills and a trust.
Here is a quick overview of some of the most important differences between wills and trusts to better help you understand the role each tool can play in your estate planning.
Comparing Wills and Trusts
A will only goes into effect upon the death of the testator (the person who created the will). With a living trust, however, the document goes into effect immediately upon signing.
With both wills and living trusts, the documents can be changed. The testator of the will or the grantor of the trust can change the terms of the document until the time of death, so long as they have the mental competency required to do so. Additionally, a grantor of a living trust will name a successor trustee to continue managing the trust and its assets upon their death.
Wills only cover distribution of property owned solely in your name at the time of your death, including interests in joint property. A will cannot cover assets that would pass directly to beneficiaries through contract, or through joint tenancy with right of survivorship.
Living trusts, however, can govern any property placed into the trust. After forming the trust, the grantor transfers assets into it. Most estate planning attorneys will suggest their clients place all of their assets into a living trust to ensure they bypass probate.
Management of assets during life
One of the primary advantages a trust has over a will is that the trust goes into effect during the grantor’s life, whereas a will only goes into effect upon the testator’s death. This means if a person becomes mentally disabled or otherwise incapacitated, a trust will allow the successor trustee to step in and begin managing their assets.
A will does not provide this same sort of backup. The loved ones of a testator would need to petition the court for a conservator or guardian to handle their affairs.
Perhaps the biggest difference of all between a will and a living trust – and the reason why attorneys often encourage the use of living trusts – is that wills must go through the probate process. Trusts bypass the probate process. This means the contents of your will become public record upon submission to probate court, while the terms of the trust stay private.
There are additional expenses and delays associated with the probate process as well that make it unattractive for people planning their estate.
About Baker Law Group
Baker Law Group specializes in Elder Law, Estate Planning and Estate Administration. View attorney profiles.
For more information about the best estate planning strategies for you and your situation, and how you can avoid probate, contact an experienced attorney at Baker Law Group.
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